Section 371EE | Leases to UK resident companies etc

(1)Non-trading finance profits fall within this section so far as they arise from a relevant finance lease in relation to which the following condition is met.

(2)The condition is that—

(a)the lease is made by the CFC (directly or indirectly)—

(i)with a UK resident company connected with the CFC, or

(ii)with a non-UK resident company connected with the CFC for the purposes of a UK permanent establishment of the non-UK resident company, and

(b)it is reasonable to suppose—

(i)that the lease is made as an alternative to the other company purchasing (directly or indirectly) the asset (“the relevant asset”) which is the subject of the lease or making (directly or indirectly) an arrangement which would fall within subsection (3) , and

(ii)that the main reason, or one of the main reasons, for that is a reason relating to a liability, or potential liability, of any person to tax or duty imposed under the law of any territory.

(3)An arrangement would fall within this subsection if—

(a)the arrangement would meet one or both of the following requirements—

(i)it would not be a relevant finance lease;

(ii)it would not involve the CFC, and

(b)under the arrangement the other company would (directly or indirectly) purchase rights to use the relevant asset.